Service with a smile

UK-based The Carphone Warehouse provides mobile and landline telephony as well as broadband services to the UK and European markets. To date it has an estimated 2.2 million residential broadband customers and 2.7 million residential voice-only customers, making it one of the top providers in its market.

Wynand Schutte, GM of the TalkTalk call centre in Cape Town, says in 2005, The Carphone Warehouse had a strong telephony brand and a large landline customer base.

"The company put a plan and process in place to start building a broadband customer base in the UK market. It started as a slow, acquisition-driven climb, but the demand for broadband in the UK, particularly super-broadband, is quite high. When The Carphone Warehouse acquired Tele2 and Onetel, increasing its broadband base, it realised it had to create more capacity."

The company then created two additional call centres in the UK. Realising the market in that country is relatively saturated, it started looking offshore.

Says Schutte: "The executives visited various locations across the world, including SA. Here they saw there were benefits in terms of the rapport between South Africans and Brits, culture similarities and cost benefits."

Andrew McNair, GM of the TalkTalk call centre hosted by Dimension Data's Merchants in Johannesburg, points out The Carphone Warehouse needed an area where it could obtain a certain level of quality for its future requirements.

"The main driver for going offshore wasn't cost, although that was a benefit. The company didn't believe the UK market could sustain the growth it was looking for. [The need was to] go into a country where [The Carphone Warehouse] could ensure the quality of service for customers would be maintained. This is what drove the company to SA."

The Carphone Warehouse already had two call centres in India, having inherited these with its acquisition of Onetel, but it had never ventured offshore itself.

"When the company came here and looked at running call centres overseas, it had to decide whether to do it itself or seek a partner," says McNair. "After going through a due diligence process, the company realised it needed a partner, not only a partner that it could outsource the bums-on-seats element to, but also an outsourcer that could provide the IT elements through a single contract. This was critical to us getting the business."

The Carphone Warehouse then decided to appoint an outsource partner, as well as set up its own call centre in SA. To that end, it appointed Dimension Data's Merchants division to set up and run a call centre in Johannesburg, as well as handle the IT requirements for the centre in Cape Town.

Merchants had the Johannesburg call centre up and running within six weeks and the Cape Town centre took TalkTalk five months to establish, with assistance from Merchants regarding which companies to speak to in order to acquire offices, furniture and the like.

TalkTalk's Schutte explains the site in Johannesburg started off at a fairly low scale in terms of scope. "The original intention was to put about 200 agent seats in there. As we've progressed, it went up to 250 and at present it's sitting at about 310 agent seats. In terms of the scope of what the centre is doing, it originally provided support for broadband customers. Now it offers broadband technical support, landline customer support, second line broadband fault handling as well as handling e-mail correspondence with customers."

The Cape Town centre handles a similar workload between its 470 agents. A third centre in Durban has 150 agents. The Johannesburg and Cape Town centres handle 200 000 and 250 000 calls per month respectively.

Schutte says TalkTalk aims to be the number-one outsource partner to customers in the UK, so there is plenty of growth to come, which one could reasonably assume will necessitate expansion of the facilities here.

"Cost is really a secondary motivation for doing this in SA. If we were just after cost benefits, we would probably be in another location. The emphasis here is on customer experience. The Carphone Warehouse has been under tremendous pressure to provide and compete on customer service, hence the [need for the] centres in SA."

The main driver for going offshore wasn't cost.

Andrew McNair, GM, TalkTalk call centre hosted by Merchants

All has not been entirely rosy, though, as McNair notes: "High-level skills salaries are spiralling out of control and it's something we need to get a handle on. An operations manager here earns far more than their UK counterpart. The long-term problem is that if salaries continue to grow at that rate, the core benefit most people look at when coming here - cost - will disappear.

"What's also missing here is government support. There are numerous companies looking to provide you with call centre staff because they benefit financially, but these tend to focus on low-level, not high-level skills, where there is a gap. We're trying to work with government and do what we can, but there are so many agencies here that don't seem to talk. We know there is Sacccom [the South African Contact Centre Community], but we don't see them doing much. Other agencies like Calling the Cape and Contact in Gauteng seem to be working against each other in terms of competing for business instead of working together for the benefit of the country. You need someone sitting above to give an unbiased view," he states.

That said, McNair believes that, for Merchants and Carphone Warehouse, SA has been a great success.

"We're looking at expanding here and in Cape Town. We're only a year down the line here and eight months down the line in Cape Town and we're ready to grow it further."

This is good news indeed for the local market, which government for one is relying on as a source of economic development and job creation. But the various call centre bodies would do well to take McNair's words to heart. If SA is to succeed in its aim to be a top contact centre and business process outsourcing destination, individual agendas and egos will need to be put aside or the entire industry will lose out.